I was going to go on a run this morning. I hate running but I need some exercise and need to do something to force a change in habits. It started to rumble just as I was getting the motivation and then it started to rain. I probably could have gone and only got a little wet but it looks like the sky will fall at any moment and I don't feel like getting caught in that type of mess.
So I read somewhere that Goldman Sachs drove up the aluminum market and made a bunch of money by buying a couple of huge warehouses and moving the metal back and forth between the two. They did not do anything illegal, they merely found a way within the system to make cheap money. This littlish event brings about a variety of questions and perhaps no answers. I saw that some people had suggested that the government should have closer oversight of necessary resources. We need to be careful of granting any entity more power. One should look and see if that entity will be motivated to act in a general best interest with this added power. What would the government's motivations be in the aluminum trade? Would it change prices for preferential contractors? There is a history of such treatment and so we have no reason to think otherwise? The brokerage firm was interested in buying the warehouses to control the price of aluminum stock. It had no interest in making cylinder heads and airplanes. No one group should control a needed commodity but those with the least interest to drive up price would probably be at the manufacturing end. The company selling cylinder heads is not selling aluminum work done. If that company did have the power to control the aluminum, it would change its focus and look toward how to generate a profit by manipulating the market. This mess demonstrates how the free market is supposed to work as a network of people and companies whose overall best interest is to work together. The network is compromised when a member can gain too much control or whose interest is not aligned with the rest. How can the market decide which members are necessary for the whole and which are like Goldman, providing no benefit to the network? How can you develop a system that meets the needs of individual and the group without having a governing body?
All this mess is not making too much sense yet and so I am just using this space to explore the various ideas involved. My initial point was that I don't understand how people make money without doing any work. The real estate "bubble" was inevitable when people where making hundreds of thousands of dollars just by buying and selling a house without doing anything to it. I guess it is all part of the need for instant gratification by the buyer and the seller. Well, back to marinating on the original idea of an organization with no governing body...Is it possible?
Off to the fun world of math and stuff...
So I read somewhere that Goldman Sachs drove up the aluminum market and made a bunch of money by buying a couple of huge warehouses and moving the metal back and forth between the two. They did not do anything illegal, they merely found a way within the system to make cheap money. This littlish event brings about a variety of questions and perhaps no answers. I saw that some people had suggested that the government should have closer oversight of necessary resources. We need to be careful of granting any entity more power. One should look and see if that entity will be motivated to act in a general best interest with this added power. What would the government's motivations be in the aluminum trade? Would it change prices for preferential contractors? There is a history of such treatment and so we have no reason to think otherwise? The brokerage firm was interested in buying the warehouses to control the price of aluminum stock. It had no interest in making cylinder heads and airplanes. No one group should control a needed commodity but those with the least interest to drive up price would probably be at the manufacturing end. The company selling cylinder heads is not selling aluminum work done. If that company did have the power to control the aluminum, it would change its focus and look toward how to generate a profit by manipulating the market. This mess demonstrates how the free market is supposed to work as a network of people and companies whose overall best interest is to work together. The network is compromised when a member can gain too much control or whose interest is not aligned with the rest. How can the market decide which members are necessary for the whole and which are like Goldman, providing no benefit to the network? How can you develop a system that meets the needs of individual and the group without having a governing body?
All this mess is not making too much sense yet and so I am just using this space to explore the various ideas involved. My initial point was that I don't understand how people make money without doing any work. The real estate "bubble" was inevitable when people where making hundreds of thousands of dollars just by buying and selling a house without doing anything to it. I guess it is all part of the need for instant gratification by the buyer and the seller. Well, back to marinating on the original idea of an organization with no governing body...Is it possible?
Off to the fun world of math and stuff...
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